The Standard Life headquarters in Edinburgh.
Photograph: Andy Buchanan/AFP/Getty Images

The insurer Standard Life Aberdeen has suffered a bruising shareholder revolt over the pay of its new finance chief, with more than two-fifths of investors voting against its remuneration report.

At its annual general meeting in Edinburgh, 42% of Standard Life shareholders opposed the report in one of the biggest investor revolts in recent years, but the resolution was passed with nearly 58% backing it in an advisory vote.

Shareholder advisory firms Glass Lewis and Institutional Shareholder Services (ISS) had raised concerns about the pay package for Stephanie Bruce, who will become the new chief financial officer at the insurance and asset management firm on 1 June.

She is joining from the accounting firm PricewaterhouseCoopers, replacing Bill Rattray, who is retiring after more than 30 years at Standard Life. She will receive an annual salary of £525,000, more than the £450,000 her predecessor was paid, and will get an annual payment equivalent to 20% of salary in lieu of a pension. She is entitled to share awards up to 350% of salary under the executive incentive plan, which are dependent on performance.

Glass Lewis said it viewed high fixed pay raises “with scepticism” because remuneration is “not directly linked to performance and may serve as a crutch when performance has fallen below expectations”. It also raised concerns over other elements of the pay package, while ISS criticised the performance conditions for not being “sufficiently stretching”.

Standard Life said in a statement following the annual meeting: “We were aware that certain institutional shareholders were not supportive of specific aspects of the arrangements relating to the remuneration of the incoming CFO.” It added that it would continue to talk to investors about their concerns and would publish an update on these discussions within six months. It will seek approval from shareholders for a new pay policy at its 2021 meeting.

The firm argued it had to offer Bruce that pay package to “attract a talented senior executive from outside of the investment management industry who was previously remunerated on a comparatively consistent annual reward package, without the significant deferral arrangements we apply”.

It said before the meeting that it had sought to address shareholders’ concerns by linking Bruce’s £750,000 joining fee, which will be awarded in shares, to achieving the company’s cost-cutting targets.

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Before the meeting, Standard Life reported a 3% rise in assets under management and administration to £569bn in the first three months of the year. Inflows were boosted by £3.5bn of assets from Virgin Money, with which the company is launching a joint venture.

Shareholder advisory group Pirc said: “As we hit the middle of May, peak AGM season in the UK, we’re starting to see a few sizeable oppose votes come through. Over the past week, a number of companies have been stung by major votes against pay, though actual defeats on the main market still stand at just one – [software company] Micro Focus.”

Last week, Standard Chartered faced a big vote against its remuneration report of 36%. Including abstentions, the number of investors who failed to back it was 38%. The protest was directed against a change in how the bank calculates its top executives’ pensions.